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Issues:
1. Levy of gift-tax on transfer of properties. 2. Validity of oral gifts under Islamic law. 3. Interpretation of Section 129 of the Transfer of Property Act. 4. Registration requirement for gifts of immovable properties. 5. Valuation of properties for gift-tax purposes. 6. Recitals in gift deeds regarding gifts made in 1954. 7. Motives behind recitals in gift deeds. Analysis: Issue 1: Levy of gift-tax on transfer of properties The appeals were filed by the assessee against the imposition of gift-tax on the transfer of certain properties through gift deeds executed by the donor in favor of his sons and daughter. The Gift-tax Officer determined the value of the gifts based on the registered documents, which the assessee contested. Issue 2: Validity of oral gifts under Islamic law The assessee argued that certain properties were orally gifted in 1954 to the donees, which should be excluded from the taxable gift. The contention was based on the legal import of oral gifts under Islamic law, which, according to the assessee, did not require registration. Issue 3: Interpretation of Section 129 of the Transfer of Property Act The Chartered Accountant representing the assessee referred to Section 129 of the Transfer of Property Act to support the argument that oral gifts under Islamic law do not require registration. However, the jurisdictional High Court's interpretation limited the scope of Section 129 to gifts made for pious or religious purposes, excluding secular gifts. Issue 4: Registration requirement for gifts of immovable properties The Tribunal held that gifts of immovable properties exceeding Rs. 100 in value must be registered through a written instrument, as per the provisions of the Registration Act. The failure to register the properties gifted orally in 1954 rendered them invalid for gift-tax purposes. Issue 5: Valuation of properties for gift-tax purposes The Tribunal upheld the valuation of the properties by the first appellate authority, as no evidence was presented to challenge the determined value. The assessee was allowed to deduct the stamp duty paid on the gifts under Section 18A of the Gift-tax Act. Issue 6: Recitals in gift deeds regarding gifts made in 1954 The Tribunal rejected the revenue's argument that recitals in the gift deeds about gifts made in 1954 were an afterthought to avoid the provisions of the Gift-tax Act. It was deemed unreasonable to assume that the assessee anticipated the legislation before its enactment. Issue 7: Motives behind recitals in gift deeds The Tribunal concluded that the recitals in the gift deeds regarding gifts made in 1954 were not an attempt to circumvent the Gift-tax Act, given the timing of registration compared to the legislative process. The levy of gift-tax was upheld, with directions to allow credit for the stamp duty paid. In conclusion, the appeals were partly allowed, with the gift-tax levy upheld but with credit granted for the stamp duty paid as per the provisions of the Gift-tax Act.
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